By Jason Olson
Over the past couple years, as remote deposit capture (RDC) has become more mainstream, financial institutions have been very focused on developing risk management programs that offer protection against fraudulent RDC transactions, as well as satisfy regulatory requirements. The majority of financial institutions today have some form of RDC risk management program in place. However, just as technology becomes more sophisticated and complex, so do the requirements from federal regulators. In recent exams many banks have been cautioned that their risk management solutions and programs are not meeting some of the more recent FFIEC, regulatory and auditing requirements that have been put in place around RDC.
So, What’s Missing?
Regulators are beginning to integrate RDC into Know Your Customer (KYC) and Anti-Money Laundering (AML) controls and regulations. One condition of the KYC regulation states financial institutions must better understand customers through identifying deposit locations. In an effort to prevent fraud and money laundering, regulators want banks to know where their items are being captured, and are demanding that information be tracked for compliance.
The majority of financial institutions, even though they have a respectable risk management program in place, don’t have the technology in place to be able to identify exactly where their RDC deposits were captured.
The technology didn’t even exist . . . until now.
In response to market demand, WAUSAU designed and introduced Location Awareness, an add-on to the Risk Monitoring module of our Deposit 24/7 Merchant™ solution, to help banks track capture location information for regulatory compliance.
How Location Awareness Works
Location Awareness tracks the IP address of the location from which the check was captured and alerts the bank if a capture is made from an unexpected location, providing greater visibility to possible fraudulent activities. The bank then has the opportunity to review the suspicious transaction and determine whether or not any action is required.
Another key feature of the solution is that it’s scanner-agnostic. So, even organizations that use scanners from multiple vendors can benefit from Location Awareness. This measure also helps banks provide information to auditors faster, protects them from fraudulent activity and helps them to meet internal and external audits.
Banks Recognize the Importance of Location Awareness
Based on their RDC related needs and their desire to improve their risk monitoring functionality to meet regulatory and compliance requirements , First Tennessee Bank, a recognized pioneer in RDC, was the first bank to partner with WAUSAU and take our solution to market.
“We needed a solution that would help us remain compliant with recent FFIEC and AML mandates,” said Karen Doyle, senior vice president and senior product manager, Treasury Management Services. “Location Awareness will help us stay ahead of the curve in terms of regulations thanks to its RDC tracking functionality. This was an important factor in the partner decision process.” To read more about First Tennessee Bank, click here.
Are You Looking to Ace Your Next RDC Exam?
For additional information regarding our new Location Awareness technology, please read our recent press release or contact a WAUSAU representative for a demonstration of our innovative solution.